This comes after the Competition Tribunal found the pharmacy group guilty following complaints registered by the public.
According to the Tribunal, the Competition Commission (the Commission) has established that Dis-Chem exerted market power in its pricing of the face masks by increasing its prices to significant levels in the context of the COVID-19 pandemic. One such increase took place on the very day that South Africa’s first COVID-19 case was announced.
“We find that in the context of a global health crisis, with excess demand of surgical masks considered to be essential in the fight against COVID-19, Dis-Chem has demonstrated that it enjoyed and exerted market power by materially increasing its prices, without a significant increase in costs, and significant increase in margins. But for the economic conditions brought about by the outbreak of COVID-19, it would not have been able to implement such material price increases in surgical masks,” said the Tribunal.
The Commission, said the Tribunal, has shown a prima facie case of excessive pricing in relation to the three types of face masks.
The Tribunal has found that Dis-chem failed to show that its price increases were reasonable.
“In our view, Dis-Chem’s massive price increases of surgical masks during the complaint period, which constitute an essential component of life saving first-line protection in a pandemic of seismic proportions, without any significant increases in costs, are utterly unreasonable and reprehensible.
“Accordingly, we find that Dis-Chem has failed to show that its price increases for SFM50 and SFM5 and Folio50 were reasonable in the circumstances of the COVID-19 pandemic.”
